Two of the stated benefits Detroit-based Karmanos Cancer Institute gave the community in 2013 for its decision to merge with McLaren Health Care Corp., an 11-hospital nonprofit system based in Flint, were the ability to increase its cutting-edge clinical research with statewide access to patients and to gain access to capital for growth.

Despite ongoing funding cuts from Medicaid and Medicare, Karmanos continued to operate in the black in 2015 with a $6.8 million total profit, which includes investment income and non-patient revenue, according to Cost Report Data, a Louisville, Ky.-based research firm. Annual operating losses have averaged $14 million since 2013.

"We are being paid substantially less by Medicaid than in the past, and this current year we took a very substantial hit, several million less," said Bepler. "We still take care of the same number of Medicaid patients. Medicare is still underpaying us. We are in the black simply because we are part of McLaren and get better contracts for services purchased."

Karmanos is located on the campus of Detroit Medical Center in downtown Detroit. DMC sued McLaren over the merger, claiming unsuccessfully that it had first refusal over McLaren to buy Karmanos. The two health companies settled the dispute in 2015 and have agreed to work more closely together on cancer care.

As part of the merger, McLaren pledged to spend $100 million to improve Karmanos and expand outpatient centers in Southeast Michigan, sources have told Crain's.

"Since we joined McLaren, we have been able to put more money into cancer research efforts than we had before, about $50 million, the vast majority in Detroit. Some of it goes to the community sites (to fund study coordinators)," Bepler said.

All in all, the McLaren partnership has proven its worth, Bepler said.

"You have to keep in mind that when we joined McLaren, the number of patients (at Karmanos) that participated in (interventional) clinical trials was 1.5 percent," said Bepler, who said that is an average percentage for community hospitals.

"Last year, we went up to 3.7 percent," he said. "We more than doubled that number, which is of course not where we want to be. We want to get that number to 5 to 6 percent."

Each year, the number of patients treated by Karmanos has increased. In 2016, 13,900 patients received care at Karmanos, up from 12,000 in 2013, Bepler said.

"This is important because patients in clinical trials do better than patients that don't participate in clinical trials," Bepler said, noting that Karmanos cannot develop new treatments without people participating in trials.

Because of the newly hired researchers and McLaren's developing statewide oncology network, Bepler said, Karmanos has increased clinical trials research funding by 11 percent to $82.4 million in 2016 from $74 million in 2014.

Karmanos now has 170 cancer researchers, up from 130 in 2012. Clinical trials have increased 34 percent to 655 from 488 during that period. But participants in Karmanos trials have grown more slowly, by 8 percent to 3,370 in 2016 from 3,105, because the bulk of new studies now require only 50 to 100 patients, down from the several hundred per study as in the past.

"What has happened nationally is that the number of large trials has gone down because of molecular studies on tumor specimens," Bepler said, noting that researchers need to enroll patients in studies with specific gene requirements.

But Karmanos also is drawing about 240 patients each year from McLaren's eight community care sites, excluding Farmington Hills, in Michigan to its downtown hospital. McLaren plans to add two more sites this year in unspecified locations.

Education of patients, physicians and nurses is the key to increasing the number of clinical trial participants, Bepler said.

"We have (begun) a special program for the process of getting informed consent of patients," he said. At the point of patient care, Bepler said, "we stress the importance of clinical trials and provide educational materials for staff and nurse practitioners."

Karmanos has also developed policies for how oncology care is delivered at each McLaren community and hospital site.

"We have specialized tumor boards where patients' care is discussed with specialized doctors," he said. "Overall, the care in the system is much more akin to academic medical. The care is simply better for the patients."